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Please show all steps: Use MACRS to compute the depreciation schedule for a carbonated beverage dispensing...

Please show all steps:

Use MACRS to compute the depreciation schedule for a carbonated beverage dispensing machine that cost $60,000 (use the 3 yr depreciation schedule). Assume salvage value is $10000.

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Expert Solution

Use MACRS to compute the depreciation schedule for a carbonated beverage dispensing machine that cost $60,000 (use the 3 yr depreciation schedule). Assume salvage value is $10000.

Assume salvage value is $10000.= In MACRS depreciation method doesn’t consider the salvage value. So not take this value in the calculation.

Depreciation schedule ( under MACRS 3 year class)

Year

Cost

MACRS rate

Depreciation

= Cost * rate

Accumulated depreciation

(Cumulative the each year dep.)

Book value at end of each year

1

60000

33.33%

19998

19998

40002

2

60000

44.45%

26670

46668

13332

3

60000

14.81%

8886

55554

4446

4

60000

7.41%

4446

60000

0

The modified accelerated cost recovery system (MACRS) is a depreciation system used for tax purposes. MACRS depreciation allows the capitalized cost of an asset to be recovered over a specified period via annual deductions. The MACRS system puts fixed assets into classes that have set depreciation periods

In a MACRS 3 year property, depreciation should charge over its 4th year. It is mainly used for tax purpose,


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